Public Option = Single-Payer = Less Competition

Proponents of the so-called “public” (read: government) option in the health-care reform debate have argued that it will increase competition and consequently help lower prices. Many proponents of the public option also support a single-payer system and view the public option as an incremental step toward single-payer.

Take for example this segment from MSNBC’s “The Ed Show” from Tuesday:

Also, see my previous blog post for other examples.

Proponents of economic competition love the idea of having many businesses and services to choose from, but they seldom think about the fact that having many customers to choose from also represents competition. A single-payer health-care system would mean only one paying customer: the federal government.

The result would mean that the government (read: customer) would be able to essentially set the price for health-care services and products. This could lead to many health-care providers going out of business or offering their services for a higher fee “under-the-table” to those individuals willing to pay for it themselves. A single-payer system also leads to an uncomfortable level of rationing, which would drive the desire of individuals to pay for their care themselves — government rules or not.

Just as having only one or a handful of producers (e.g.; health care providers) means the producer get to “fix” the prices, conversely, having only one consumer/payer (e.g.; the federal government) means the payer gets to “fix” prices. Just as some people are unable to afford expensive health care under the present system, conversely, some providers (e.g.; doctors, hospitals, drug manufacturers) may not be able to afford to provide health-care services and products (to individuals who may desperately need it) under a single-payer system. This would reduce the supply of health-care providers and, consequently, increase the cost.

This is just one problem associated with the economic realities of excessive government meddling in the health-care system. It’s another example of government action that would result in less-than-desirable unintended consequences — further adding to my appreciation of economics and cynicism of politics.

One Response to Public Option = Single-Payer = Less Competition

  1. […] whether public-option proponents would view these consequences to be unintended or not is highly questionable. Possibly related posts: (automatically generated)North American Union: The SPP is a […]

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